House DollarMany homes in Australia are under-insured without the knowledge of the homeowner or policy holder.
As your Insurance broker, our concern with under-insurance is the effect on you, the policy holder, in the event of a loss. If you do not have the correct limits applied to both your home and contents policy you may potentially be left with a settlement well below the actual replacement cost for these items. The insurer has the right to reduce your settlement due to the existence of ‘Co-Insurance’ or ‘Average’ clauses contained within the policy wording.

For your reference, a ‘Co-Insurance’ or ‘Average’ clauses state that a property must be insured for its ‘full replacement value’ . If a loss occurs and the insurers assessment shows that the property was not insured for its full replacement value, the insurer has the right to reduce the claim settlement by the equivalent percentage difference between your insured value and the actual replacement cost.
Refer to the attached link for a working example

To ensure the security of our client’s financial position in the event of a claim we attach a simple home and contents calculator for your benefit. The calculator below will enable you to accurately calculate the cost of your buildings and contents and ensure that your policy limits are set accordingly.
We encourage all clients to review these limits annually prior to the renewal of your home and contents insurance each and every year.
Remember, the reason we have taken the policy in the first place is to protect our assets in the event of a claim – so let’s make sure the policy will respond in line with our expectations and insure all the possessions accurately.

Sum Insured Home Contents Calculator Cordell Residential Valuer